Stepping Up

The clouds have silver linings. While none of us can be pleased that the financial reform legislation falls short of imposing fiduciary standards on all those claiming to be financial advisors, it does have certain charms. Namely, it gives us a golden opportunity to underscore the differences between brands. Certified Financial Planners ™ have cheerfully taken upon ourselves the full responsibility and accountability of fiduciary obligations; other “advisors” are employed by primary industries who spent millions/billions to avoid them. This is a distinction of great difference.

As a wise man of my acquaintance once noted, “Your shot may be cheap but it is not free.” It will not be “free” for Wall St. to disclaim the fiduciary standard– especially in view of its relatively warm embrace by the CFP community. Wirehouse brokers can continue to hide behind “suitability” even as CFP® practitioners have declared themselves to be trustworthy servants and something more than salespeople. We have said to folks without equivocation “When you hire one of us, you can be sure we are on your side.”

When it comes to money, this is a vital distinction. We put the client ahead of ourselves. We don’t “produce” just because a sale is made. We “produce” because we have served the client’s best interests—especially when the client has trusted us to tell them what those “best interests” are.

This is not to suggest that financial product salespeople just sell junk or are inherently untrustworthy. But that is not the point. When it comes to complex issues like health and money, most people need an advisory fiduciary between them and the purchase of complex, intangible products.

Another truth, if you can imitate Ponzi, et al, then the risk is palpable. There are dangerous potential consequences of working with those who would not be fiduciaries.

And we need to tell the story. What of those who have cheerfully committed to placing their client’s interests ahead of their own? That CFP® licensees have stepped into accepting our fiduciary status is one of the great tales of the 21st century. Who else has committed their credentials and their well-publicized ethics to fair dealing and lofty standards? Ought that not be trumpeted and promoted? Some denizens of “Wall St.” will no doubt continue their business as usual but what a great opportunity for CFP’s to claim the high road.

There is a price to be paid for permission to play fast and loose, refusing to step up to the line of responsibility and acting like it is ok for “caveat emptor” to apply to clients clearly relying upon their advisors for advice in relationships of trust and confidence. The point is that this is a golden opportunity to draw the distinctions between “advisors” and those who have declined the opportunity to declare their trustworthiness and adroitly avoided commitment to the standards implied by their employers’ media.

One Response

Well said Richard, we advise all potential clients worried about getting taken by unscrupulous “financial advisors” to place a greater weight on certified financial planners when going through their selection process. While not fail safe, the designation adds a little more security knowing the CFP has much more to lose if any wrongdoing occurs.